The Securities and Exchange Board of India (Sebi) has pulled up Birla Sun Life

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Mutual Fund for failing to abide by the advertisement code on annualised compounded yield in its advertisement on the Birla Frontline Equity Fund. In its order issued on February 20, the market regulator has told the fund house to strictly follow the Sebi guidelines on mutual fund advertisement.

According to the market regulator, the advertisement put out by the fund house through 13 newspapers and hoardings across 16 cities between July 17-23, 2009 had stated that Birla Frontline Equity Fund has given a 520 per cent return in seven years, which was in violation of Sebi guidelines that says only annualised compounded yield should be advertised if the scheme has been in existence for over one year. Birla Frontline Equity Fund was floated in 2002.

Sebi has further observed the advertisement failed to clarify that the calculation of return should assume that all the payouts during the period have been reinvested in the units of the schemes at the net asset value.